(Fox Business) Purchasing a home is an exciting milestone in a person’s life, but criminals are increasingly exploiting such transactions through real estate fraud, robbing victims who are often left with little or no recourse.
CertifID’s 2024 State of Wire Fraud report released Tuesday found that 1 in 20 Americans who bought or sold a home within the past three years have been victims of some type of real estate fraud, with the median amount in consumer losses exceeding $70,000 as a result of stolen buyer’s down payments and seller’s net proceeds.
The wire fraud protection company warns fraudsters have become increasingly skilled at leveraging public records, breaching broker and title agency systems, and posing as someone involved in a transaction to steal from unsuspecting consumers.
Virginia resident Darryl Aldrich and his wife were targeted in such a scam and shared the experience with FOX Business in an interview, saying it is “still kind of hard to believe” it happened.
Two days before closing on their home purchase, Aldrich received a legitimate email from the title company, alerting him that he would be receiving wiring instructions the next day. So, when he received an email with the identical email signature and wiring instructions the next day, he moved forward with sending the wire – more than $28,000.
When the Adlrichs showed up at the closing, the title officer asked when they planned to send the wire, saying it had not been received. So, the couple pulled up the email as proof of the instructions they had followed.
The problem was, the second email was sent by a fraudster impersonating the contact at the title company, with wire instructions to another account. The Aldrich’s money had been wired to a criminal.
“All of our hearts just sank at that point,” Aldrich recalled. “That money was just gone out of our account.”
Aldrich found out later that the email address of the fraudster was different from the first email that had been sent from his contact at the title company but said he could not view (and therefore verify) the email address because he had pulled it up on his smartphone.
Thankfully, Chase, the bank receiving the funds, flagged the account the Aldrichs had sent the payment to because of suspicious activity, and the funds were restored to the couple’s account days later. However, many victims are not so lucky.
The latest data from the FBI shows this type of crime, which falls under the category of business email compromise, cost victims a record $446.1 million in real estate transactions during 2022, and CertifID co-founder and CEO Tyler Adams told FOX Business the crime is only accelerating as fraudsters become more sophisticated.
“If you are a first time homebuyer entering into a real estate transaction, you need to be made aware you are entering one of the biggest cybercrime environments that we’ve ever seen today,” Adams said. “You have to be on high alert with every email that you get from your real estate agents, you have to be on high alert with every communication they get from your title company, because at any point, somebody’s communication could be compromised or broken down, and you could start receiving emails that look like they’re coming from one of those trusted parties when they’re not.”
He added, “That’s where we see the consumer get hurt the most, because they received communication convincing them to send money to a fraudulent account or entity, and they believe it to be true.”